6 Killer Business Lessons I Learned from Shark Tank
#4. Deals are 2-way streets — It is not always about money
I have been watching Shark Tank for some time now. Especially since the lockdown, when I came across the show while browsing on the TV.
For those of you who are not familiar, Shark Tank is an American business TV show which started in 2009. Small business entrepreneurs from all around the world pitch their idea/business model to a panel of investors (5 “sharks”) and persuade them to invest money in their idea — to turn their dreams into million-dollar realities.
The sharks who are the panelists in the 11th season are Mark Cuban, Barbara Corcoran, Lori Greiner, Kevin O’Leary, Robert Herjavec and Daymond John.
Earlier, I remember watching the show only for fun. It was amazing to see all the great ideas pitched, and the happiness I shared on a successful deal was tremendous! But it wasn’t until a conversation with one of my friends I realised how much I had learnt from it. I want to share these lessons with you all you here.
1. You will never know till you ask
In the 6 months of my binge watching the show, I have seen all kinds of deals and evaluations made in the tank . All of them had one point in common.
The participant was not afraid to ask or re-negotiate the said terms.
This went both ways. Either the person convinced the panel that his/her product was worthy enough of the said investment and got the deal. Or, he/she had to accept or reject the offered deal.
But then I realised recently, the maximum the person could lose is…nothing! Yes, the judges could possibly say no, but if the participant had not even tried, they would not even have known such a chance could exist! Such sort of deal could change a person’s life.
Lesson: Never be afraid to negotiate or take any sort of chance. The most that could happen is you won’t get the chance. But if you got the opportunity (by luck sometimes), it may be one of those moments which can change your life.
2. Know everything about your business/product by the tips of your fingers
There have been so many cases in Shark Tank, where the product swayed the judges, but they ended up not striking a deal with the participant. Reason? Because he/she did not know all the numbers by heart.
This might have happened for many reasons. The participant might not have been careful enough to learn everything, or they might have forgotten because of the pressure. Whatever might be the case, this cost them the deal of their lives!
Lesson: When you pitch your product or business idea to anyone, make sure you know EVERYTHING about your numbers (sales, profits, etc), features and services that you are going to provide. Not knowing them by heart gives an impression to the investor that you are not serious about your business. Why would they invest in your business when you don’t show your investment in it, right?
3. First impression does matter
The participant’s entry into the tank starts with his/her sales pitch, which creates the first impression of them to the Sharks.
Shark tank has seen all different sales pitches. The serious type where the person let the investors know all the features of the product, there were direct demos and role plays. There was also a rapper once! Many of them were confident of what they were saying and looked like they knew their shit.
Their confidence and innovativeness was important. Their personality was important.
They were the ones who succeeded, or at least made a good impression. There were also cases when the sharks had offered to provide them with mentorship (which is invaluable), even if a deal was unsuccessful.
Lesson: Be confident and innovative when you introduce yourself and in your sales pitch. Try to create a connection with the investor which can lead you to a lifelong relationship even if the deal becomes unsuccessful.
4. Deals are always 2-way streets. It is not always about money.
When you get an investor for your business, it is not only their money you receive. It is their many years of experience and lessons learned from it. You get their contacts around the world and their guidance.
Sometimes their guidance and experience are even more important than money.
So many times when the participant gets multiple offers, I have seen them asking — “What can you get on the table other than money?” Knowing this is of extreme importance and the answers you receive will play a pivotal role in deciding your deal.
For e.g. one participant had asked Mark Cuban whether he would sign every 1000th sale. He agreed! This might help the person enormously in branding, and it’s not monetary.
Lesson: Always ask the investors what they can get on the table in case of a successful deal. You should know what you are getting into. Of course, you can know this by thorough research from your side, but it is always good to know it from the investors themselves.
5. Your product need not be complex. It should solve a consumer’s problem.
You always find people with “great” ideas and complicated products. Tonnes of such ideas fill the Shark Tank. There are those which require enormous investments, research, technological brains and are of course expensive (some times).
I am not dissing these ideas off, and I am not even in a position to. But all I’m saying is, don’t let these complicated products not keep your product in the forefront. Thinking it is too simple.
Self-doubt is a powerful tool, isn’t it? This situation has occurred too many times in my own life. I am an over-thinker, and there are always too many thoughts and ideas filling up my brain. Most of the time, I tend to not consider my idea important enough because I think it is too simple.
Instead, the question I should ask myself is “ Will this product solve a pain point of the customer?”
Lesson: Never underestimate your product or idea. Never think it is too simple. Ask yourself (and do a market research, of course), does it solve a problem? You never know what your next business venture could be.
6. Learn from criticism
I know this is too cliche, but it’s true. A lot of us take criticism to our heart. We either become too harsh on ourselves or the others, thus we end up not seeing the message in it.
Most of the time, the sharks tell the contestants why they do not wish to enter a deal with them. They also give them words of advice about what are their weak points and how they can proceed.
If the contestants take their criticism or comments positively and work on their mistakes, they would go very far. Because they are getting advice from experts in the field with loads of experience.
Lesson: We get upset when we don’t receive what we expect. It is natural, and it’s human. But don’t let it stop you from learning from your mistakes from the mentorship and advice you receive. You would be in a far better place if you do so.
Final thoughts
There is so much we can learn from what information we consume and also our surroundings. Shark tank was one such experience for me, which taught me so much about starting a business and also about life. In summary, below are the lessons I learnt from the show, and I hope they help you too:
- Do not be afraid to negotiate or ask anything. You never know what might take you to the next stage.
- Be thorough with all the details regarding your business. It is very important.
- Be as confident and innovative in your sales pitch. It will create a good impression on your investor.
- Look out for what the investor can provide other than the money.
- Focus on solving a consumer’s problem, and not on creating a complex solution.
- Be open to criticism and learn from them.
